By Dr Antoine Martin, Chairman, The Asia-Pacific Circle, Hong Kong
A Research Report by The Asia-Pacific Circle, supported by Braumiller Law Group.
‘Protectionism’ has become a big and noisy word lately. While free(er) trade has over time become a pillar of international economic and political relations over most parts of the world, the trend is rapidly shifting.
In the United States, trade has somehow become a political enemy. The Presidential campaign was largely based on a ‘America First’ argument which rapidly led Candidate Trump to make promises as to the fate of global trade. President Trump, as a result, began his mandate with a clearly protectionist move, i.e. a loud withdrawal from the Trans-Pacific Partnership Agreement which would have given US firms a freer access to eleven economies in the Asia-Pacific region. As of today, the NAFTA agreement is also being questioned, which suggests that the protectionist trend might be here to stay.
In the European Union, trade has become a complicated topic. Politics have taken over policy and, all in all, protectionism is becoming a big thing as well. In theory, the EU is all about the free exchange of goods and the free circulation of capitals and persons. In reality, the EU is fighting for its economic and political model and is having the greatest difficulty to convince, both internally and externally.
From our Hong Kong perspective, an important question can therefore be asked: protectionism is on the rise, but what impacts are to be expected for the Asia-Pacific region, both in terms of trade leadership and business.
With this second research report, ‘Protectionism on the Rise: What impacts for Business in the Asia-Pacific?’, The Asia-Pacific Circle aims at provoking discussion on those issues and at stimulating the exchange of ideas on international and regional leadership.
We have approached protectionism through various domestic perspectives, including of course the United States, the European Union, China and various Asia-Pacific economies. We have analysed the reasons behind the multiplication of large scale ‘mega’ free trade agreements over the past decades and have taken the deliberate decision to suggest that, all in all, the Asia-Pacific would progressively gain from the current trends.
On the political side of things, we find interesting to note that while Washington and Brussels are giving away their global leadership on trade (deliberately or not), Asia-Pacific organisations such as the APEC and the ASEAN are standing out, suggesting that they will keep moving forward. In fact, while we suggested in late 2016 that Candidate Trump’s policy plans would make China great again, the US’ historical trade partners have indeed started shifting. Some of them have begun talks with the region, which now talks in its own name and therefore has a significant chance to rise and shine as an increasingly influential international actor. Meanwhile, Beijing is presenting itself as the new leader of free trade and will increasingly capitalize on its various economic development projects to take an increasingly important role in leading global and regional discussions. To be followed…
Dr Antoine Martin | Chairman, The Asia-Pacific Circle, Hong Kong.